ASIA to Europe container shipping rates have plunged to new lows as the battle to grab market share heats up by undercutting rivals despite the risks involved in such behaviour.

The Shanghai Containerised Freight Index (SCFI) closed last week at US$585 per TEU, down 5.2 per cent on the previous week. The index has lost $300 per TEU since January.

However, shipping lines have announced rate hikes, reported Singapore's Splash 24/7.

'Whether these increases are successful or not will show in the coming week whether, the rate war was a short-term spat in the traditional post-Chinese New Year market or whether it is a much more serious issue in which case the profitability for all of 2018 is in jeopardy,' SeaIntelligence Consultant Lars Jensen wrote on LinkedIn.

Last week's SCFI spot rate decline means that rate levels are now 17 per cent lower than what the seasonal developments can account for, according to SeaIntelligence data.

'The only way to accurately describe the data right now is as a re-kindling of the freight rate war on the Asia-Europe trade,' Mr Jensen wrote.

ClipperMaritime container analyst Neil Dekker pointed to the slew of giant newbuilds entering the trade lane as one of the reasons for the fall in freight rates.

'Headhaul volumes have been very slow to gain traction after the Chinese New Year Holidays and with newbuilds being delivered to the Asia-North Europe trade at a rapid pace in the next few months, especially from Cosco, ocean carriers should be very wary of the low rate levels,' Mr Dekker told Splash.

'Last week, the SCFI rates reached the lowest point since June 2016 when carriers were involved in a destructive rate war.'